JES: “Can someone tell me why realtors – unlike accountants and lawyers – are paid on a percentage basis to begin with? Shouldn’t we be paying for the amount of work done, or the time involved and not just some arbitrary percent?”
My understanding is that the more expensive the house, the more you want to instill reward for the agent to find the special buyer. The risk of not selling an expensive home is greater than not selling a cheap home.
That justfication holds more strongly for the sellers agent; the buyer’s agent’s work is still roughly the same (sure there’s extra due diligence in the paperwork on a million dollar home, but the paperwork is still the same.)
But the problem is that it still takes the same effort to find a buyer for a home in a $200k-median-price city as it is in a $600k-median-price city.
And all this legal stuff seems like bull to me. More than half of the contracts that clients sign are there to protect the brokers and to lock in their fees. Any breach of contract in any kind of business relationship can be taken to court–why should the client pre-pay for the agents defense in the context of real estate?
sdrealtor has a couple times told us we are naive and we shouldn’t be trivilizing all this. Perhaps so, but I think there’s still kool-aid being served, and it’s healthy to get this out in the open. If I haven’t been following sdrealtor as long as I have, I would have considered him patronizing and trying to scare us into relying on them.
It’s disappointing that the 33% vs. 6% comparison is made. that analogy has more holes than swiss cheese. A lawyer works on relatively unique cases and is competing against the wits and knowledge of the opposing lawyer. A lawsuit can take months or years involving many people and experts. An RE agent is someone is trained to do the same paperwork over and over and to give non-legal advice (which the client pre-pays for whether they want it or not, or whether that information is public anyway.) The bar exam that admits lawyers is very very stringent (going to Ivy league schools is not the requirement to be a successful lawyer), so a client can have some expectation of quality in service. RE agents can get licensed in far less time and schooling (I don’t need to tell you how much), and even after that they STILL don’t know what the hell they’re doing on average.
